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Old 03-13-2019, 10:09 AM   #41
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Basel III is supposed to come into effect at the end of this month. I'm still seeing mixed reporting out there on what it means for banks and gold.
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Old 03-13-2019, 06:53 PM   #42
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This is an old thread and I had pretty much forgotten about Basel3
I thought the TBTF banks had everything they needed )-:

So what does the mixed reporting suggest might happen Bug ?

and in reply to your previous post on this thread -

Quote :
So, it seems that we understood it backwards - gold isn't going to be valued at 85%, it's going to be valued at 15%. 85% is the value of cash they need to hold in reserve to cover the value of the gold (in case the market/price crashed).
A great way to get gold holders to give up on the idea and buy it up at a sale price
They clearly will do pretty nasty and desperate things to obtain enough gold to keep the show on the road ?
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Old 03-18-2019, 08:14 AM   #43
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Originally Posted by rblong2us View Post:
...
So what does the mixed reporting suggest might happen Bug ?
...
Some suggest it means banks will be increasing gold holdings as it's a now a better asset. Others, as you quoted, suggest it's actually now a worse asset and will lead to banks selling off gold holdings.

I wish I could find a definitive source explaining the situation in clear language.
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Old 03-19-2019, 07:23 AM   #44
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Here's another report on Basel III written by someone who sounds a lot like a gold bug, but which also describes the 85% haircut as requiring banks to hold more cash collateral for gold holdings:

http://bmg-group.com/gold-zero-risk-monetary-asset/

The author briefly mentions the NSFR issue then talks about how gold qualifies as “a 0% risk weighting for risk-based capital purposes.” It doesn't really explain what that means though.
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